PAPER ROUND PROPERTIES LLP

Executive Summary

Paper Round Properties LLP maintains a strong investment property asset base supporting its net assets, but significant current and long-term liabilities relative to cash and turnover raise medium-level concerns regarding liquidity and operational sustainability. The absence of turnover and employees suggests a non-trading property holding structure reliant on asset valuation rather than operating income. Further due diligence on debt terms, income sources, and valuation practices is recommended to fully assess financial stability.

PAPER ROUND PROPERTIES LLP - Analysis Report

Company Number: OC432554

Analysis Date: 2025-07-20 13:39 UTC

1. Risk Rating: MEDIUM
   The company demonstrates a solid asset base primarily in investment property with growing net assets, but its high current liabilities relative to cash and current assets, alongside zero reported turnover, introduce some concerns about liquidity and operational cash flow.

2. Key Concerns:

• Liquidity Mismatch: Current liabilities (~£1.13M) significantly exceed cash reserves (£25.9k) and total current assets (£119.9k), suggesting potential challenges in meeting short-term obligations without relying on asset sales or refinancing.
• Zero Turnover History: The company reports no turnover for multiple years, which could imply reliance solely on investment property valuation gains or external funding, raising questions about sustainable income generation and operational viability.
• High Long-Term Debt: Creditors due after one year stand at £1.13M, which is substantial relative to net assets (£851k), indicating leveraged financing that may increase solvency risk if property values decline or refinancing options tighten.

3. Positive Indicators:

• Strong Asset Base: Investment properties increased in value from £1.705M to £1.864M year-on-year, supporting net asset growth and potentially enhancing collateral quality.
• Net Asset Growth: Members’ interests increased from £721k to £763k, reflecting retained value and some capital appreciation.
• Up-to-date Filings: The company is current on its accounts and confirmation statement filings, indicating compliance with statutory requirements and reducing regulatory risk.

4. Due Diligence Notes:

• Investigate the nature and terms of the current and long-term liabilities to understand repayment schedules and covenants, particularly given the mismatch with liquid assets.
• Clarify the source of funding and cash flow since turnover is reported as zero; assess whether rental income or other revenue streams exist but are not captured in turnover figures.
• Review the valuation methodology for investment properties and confirm if these valuations are supported by independent appraisals to assess risk of impairment.
• Confirm business strategy and sustainability given no employees and no reported operating income, to determine if the entity’s purpose is purely property holding or if operational activities are planned.
• Check for any contingent liabilities or off-balance-sheet obligations that may impact solvency.